Page last updated at 16:03 GMT, Friday, 6 February 2009

Bid to trim Obama's stimulus plan

Barack Obama urges stimulus bill action

US senators are reviewing President Barack Obama's $900bn (616bn) economic stimulus package to try to cut costs.

Moderate Democrat and Republican senators have argued that the plan should be trimmed by up to $90bn before it is voted through.

Mr Obama has warned the economic crisis could become a "catastrophe".

The president said that if Congress failed to pass his stimulus package, the resulting recession could destroy five million US jobs.

Speaking at a meeting of Democrats from the House of Representatives, Mr Obama said: "They didn't vote for the status quo; they sent us here to bring change. We owe it to them to deliver."

'Trim the fat'

Bipartisan talks resumed on Friday.

The New York Times reported that the cuts included $40bn in aid for states, more than $14bn for various education programmes, $4.1bn to make federal buildings energy efficient and $1.5bn for broadband internet service in rural areas.

Democratic senator Mary Landrieu, one of those involved, said the group had "trimmed out some of the fat".

Tax cuts for working families: $247bn
Job-creating investments in infrastructure and science: $165bn
Job-creating investments in health: $153bn
Job-creating investments in education and training: $138bn
Job-creating investments for an energy independent America: $82bn
Job-creating investments tax cuts for small businesses: $21bn
Helping Americans hit hard by the economic crisis: $72bn
Source: Senate Appropriations Committee

She told the Associated Press news agency that the senators had then added extra infrastructure spending.

On Thursday, Democratic Senate Majority Leader Harry Reid said he was "cautiously optimistic" that the bipartisan group would reach a deal by the end of Friday.

If not, he said he would call for a vote on Sunday, aimed at moving to a final vote.

The House of Representatives approved its version of the package last week, worth $825bn, without any Republican support.

The two different versions of the bill will then have to be reconciled in a joint House-Senate committee before facing a final vote.

About one-third of the package being considered is composed of tax relief, with the rest devoted to spending on infrastructure projects.

Broadly, Republicans want more tax relief and less spending, and they complain that some projects would do little to stimulate the economy or create jobs.

Democrats say the spending Republicans are calling wasteful amounts to a tiny percentage of the overall package.

It comes amid another batch of gloomy economic figures.

The labour department said the number of workers filing new claims for jobless benefits had hit a 26-year high last week.

And figures published on Friday showed that nearly 600,000 private sector jobs were purged last month, the worst monthly figure since 1974.

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